Netflix has tapped the investment bank Moelis & Co. as the streamer explores a potential bid for Warner Bros. Discovery’s studio and streaming business, according to Reuters.
Additionally, the company has reportedly been granted access to Warner Bros. Discovery’s data room in order to review financial details needed to make an offer, the outlet said, citing three unnamed sources.
Representatives for Warner Bros. Discovery and Moelis declined to comment. Representatives for Netflix did not immediately return TheWrap’s request for comment.
Netflix stock is up 3.2% in after-hours trading on Thursday, while WBD stock is up 3.3%
The latest update comes after Warner Bros. Discovery launched a strategic review last week following “unsolicited interest” from “multiple parties” for all or part of the company.
In addition to continuing on with its planned split into Warner Bros. and Discovery Global, which is on track for completion in April, the company’s board will also consider separate transactions for those two companies or a deal for the entire combined company. WBD also said it would consider an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to its shareholders.
Netflix co-CEO Ted Sarandos reiterated during the company’s third quarter earnings call earlier this month that it has “no interest” in acquiring legacy media networks, but said that the company believes it can and will be “choosy” with regard to M&A.
“It’s true that historically, we’ve been more builders than buyers, and we think we have plenty of runway for growth without fundamentally changing that playbook. Nothing is a must have for us to meet our goals that we have for the business,” he explained. “But we focus on profitable growth and reinvesting in our business, both organically and through selective M&A. And when it comes to M&A opportunities, we look at them, and we look at all of them.”
“It’s our responsibility to look at every significant opportunity,” co-CEO Greg Peters added. “We’ve got a clear framework to evaluate those opportunities and we’ll do whatever we think is best to grow the business.”
In addition to Netflix, Comcast has been floated as a potential suitor for WBD’s studio and streaming business. On Thursday, Comcast president Mike Cavanagh said the company’s bar for M&A remains “very high” and that its current strategies are “really sound and durable without M&A.”
But he also acknowledged that the company would “look at things that are trading in the space around our industry” and figure out if there’s ways to add value, suggesting the company would be open to WBD’s studio and streaming assets after the company spins off its cable network portfolio into Versant.
Experts previously told TheWrap that, while a Comcast bid for Warner Bros. makes strategic sense, it would face challenges securing regulatory approval from the Trump administration and beating the deep pockets of the Ellison family, who have been aggressively bidding for all of the company.
When asked about the feasibility of a bid, Cavanagh said that he thinks “more things are viable than maybe some of the public commentary that’s out there.”
